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TMI Blog2019 (4) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 (5) TMI 391 - SUPREME COURT OF INDIA] had occasion to elaborately consider provisions of Sections 138 and 139. In the above case, trial court had acquitted the accused in a case relating to dishonour of cheque under Section 138. The High Court had reversed the judgment of the trial court convicting the accused. In the above case, the accused had admitted signatures on the cheque. This Court held that where the fact of signature on the cheque is acknowledged, a presumption has to be raised that the cheque pertained to a legally enforceable debt or liability, however, this presumption is of a rebuttal nature and the onus is then on the accused to raise a probable defence. Thus, the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability, which, of course, is in the nature of a rebuttable presumption. In the present case, signature on cheque having been admitted, a presumption shall be raised under Section 139 that cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of the PW1, when the spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 6,00,000/- was given by the accused, but the same was returned by the bank with the endorsement Funds Insufficient on 01.03.2012. 2.3 After notice dated 12.03.2012, which was served on the accused on 13.03.2012, a complaint was filed. PW1 filed his examination-in-chief and was also crossexamined on behalf of the accused. The complainant in support of the complaint filed original cheque dated 27.02.2012, original cheque return memo dated 01.03.2012, office copy of the notice dated 12.03.2012, postal receipt dated 12.03.2012, acknowledgment letter issued by the Department of Post dated 16.04.2012 and letter to Head Post Office dated 11.04.2012. The accused in support of his defence filed Ex.D1 certified copy of plaint in O.S. No. 148 of 2011, Ex.D2- Certified copy of the private complaint No.119/2012 in CC No. 2298 of 2012 and in Ext.D3, certified copy of registered sale agreement. 2.4 The trial court framed following two questions:- 1. Whether the complainant proves beyond all reasonable doubts that, the accused had issued a cheque bearing No.839374 dated 27-02-2012 for ₹ 6,00,000/- of Pragathi Gramin Bank, Nijalingappa Colony Branch, Raichur in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions of the learned counsel for the appellant contends that signature on the cheque having been admitted by the accused, a presumption has rightly been raised that cheque was given in discharge of a debt or liability. The accused has not been able to prove any probable defence and the High Court has rightly convicted the accused. No case was taken by the accused that complainant has no other source of income. Learned counsel for the complainant has relied on judgment of this Court in Kishan Rao Vs. Shankargouda, (2018) 8 SCC 165. 5. We have considered the submissions of the counsel for the parties and have perused the records. 6. To recapitulate facts again, the cheque dated 27.02.2012 was presented for encashment by the complainant, which was returned on 01.03.2012. Signature on the cheque is not denied by the accused, due to which presumption shall be raised that cheque was issued in discharge of any debt or liability. The complainant gave his evidence to prove his case. In the examination-in-chief, he stated that a loan of ₹ 6,00,000/- was a hand loan and in discharge of the same, the accused had given a cheque dated 27.02.2012. Neither in the complaint nor i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s ₹ 6,00,000/- and the complainant is an retired bus conductor and he had retired from service in the year 1997 and has received the entire retirement monetary benefits of ₹ 8,00,000/- and the same was deposited in the account of the complainant and it was encashed by the complainant. It is observed that the complainant is silent as to his source of income at present. He has nowhere specified as to what is he working and his earning, to show his position to lend the amount as specified in the cheque. There is no single document to show his earning nor has the complainant executed any document for having lent such heavy amount of ₹ 6,00,000/- to the accused. Further, it is the suggestion of the accused to PW-1 that, the accused by transferring his interest to lease hold to one M/s. Sri.Lakshmi Narasimha industries has received a sum of ₹ 15,00,000/- and it is also admitted by PW-1 that he was the witness to the said transaction. From the above, it raises doubt on the very cheque Ex.P-1 held by the complainant and the nonproduction of any document by the complainant to 18 C.C.NO.2675-2012 show his earning, and the complainant has not executed any document befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cused especially in a case where some statutory presumption regarding guilt of the accused has to be drawn. A Three-Judge Bench of this Court in Kali Ram Vs. State of Himachal Pradesh, (1973) 2 SCC 808 laid down following:- 23. One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused, but the burden even in those cases is upon the prosecution to prove the existence of facts which have to be present before the presumption can be drawn. Once those facts are shown by the prosecution to exist, the Court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if led, is to be seen with a doubt. The bare denial of the passing of the consideration apparently does not appear to be any defence. Something which is probable has to be brought on record for getting the benefit of shifting the onus of proving to the plaintiff. To disprove the presumption, the defendant has to bring on record such facts and circumstances upon consideration of which the court may either believe that the consideration did not exist or its nonexistence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist 12. Justice S.B. Sinha in M.S. Narayana Menon Alias Mani Vs. State of Kerala and Another, (2006) 6 SCC 39 had considered Sections 118(a), 138 and 139 of the Act, 1881. It was held that presumptions both under Sections 118(a) and 139 are rebuttable in nature. Explaining the expressions may presume and shall presume referring to an earlier judgment, following was held in paragraph No.28:- 28. What would be the effect of the expressions may presume , shall presume and conclusive proof has been considered by this Court in Union of India v. Pramod Gupta, (2005) 12 SCC 1, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials on record but also by reference to the circumstances upon which he relies. 15. In Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, (2008) 4 SCC 54, this Court held that an accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. Following was laid down in Paragraph No.32:- 32. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on record. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. 16. This Court again reiterated that whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to prove a defence on the part of an accused is preponderance of probabilities . In paragraph No.34, following was laid down:- 34. Furthermore, whereas prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist 18. A Three-Judge Bench of this Court in Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 had occasion to elaborately consider provisions of Sections 138 and 139. In the above case, trial court had acquitted the accused in a case relating to dishonour of cheque under Section 138. The High Court had reversed the judgment of the trial court convicting the accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cused cannot be expected to discharge an unduly high standard of proof. In paragraph Nos. 27 and 28, following was laid down:- 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant-accused cannot be expected to discharge an unduly high standard of proof. 28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat, may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive burden. (v) It is not necessary for the accused to come in the witness box to support his defence. 24. Applying the preposition of law as noted above, in facts of the present case, it is clear that signature on cheque having been admitted, a presumption shall be raised under Section 139 that cheque was issued in discharge of debt or liability. The question to be looked into is as to whether any probable defence was raised by the accused. In cross-examination of the PW1, when the specific question was put that cheque was issued in relation to loan of ₹ 25,000/- taken by the accused, the PW1 said that he does not remember. PW1 in his evidence admitted that he retired in 1997 on which date he received monetary benefit of ₹ 8 lakhs, which was encashed by the complainant. It was also brought in the evidence that in the year 2010, the complainant entered into a sale agreement for which he paid an amount of ₹ 4,50,000/- to Balana Gouda towards sale consideration. Payment of ₹ 4,50,000/- being admitted in the year 2010 and further payment of loan of ₹ 50,000/- with regard to which complaint No.119 of 2012 was filed by the complainant, copy of which c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 118(b), a presumption shall be made as to date that every negotiable instrument was made or drawn on such date. Admittedly, the cheque is dated 27.02.2012, there is not even a suggestion by the complainant that a post dated cheque was given to him in November, 2011 bearing dated 27.02.2012. Giving of a cheque on 27.02.2012, which was deposited on 01.03.2012 is not compatible with the case of the complainant when we read the complaint submitted by the complainant especially Para 1 of the complaint, which is extracted as below:- 1. The accused is a very good friend of the complainant. The accused requested the Complainant a hand loan to meet out urgent and family necessary a sum of ₹ 6,00,000/- (Rupees Six Lakh) and on account of long standing friendship and knowing the difficulties, which is being faced by the accused the complainant agreed to lend hand loan to meet out the financial difficulties of the accused and accordingly the Complainant lend hand loan ₹ 6,00,000/- (Rupees Six Lakh) dated 27.02.2012 in favour of the Complainant stating that on its presentation it will be honored. But to the surprise of the Complainant on presentation of the same for collect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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